Wine industry succeeds in recession-weary Michigan

A state thirsting for good economic news is toasting the success of an up-and-coming industry: winemaking.

LAKE LEELANAU, Mich. – A state thirsting for good economic news is toasting the success of an up-and-coming industry: winemaking.

Vineyards and tasting rooms are springing up rapidly in Michigan, where fertile hillsides near the Great Lakes provide ideal settings for cool-weather varieties such as riesling, pinot grigio and chardonnay. Grape growing and wine making still have only a fraction of the muscle wielded by the automobile industry, but their success is striking given the economic downturn, which hit Michigan years before the rest of the nation.

Eleven wineries have opened in the past year and four others will soon follow, said Linda Jones, executive director of the Michigan Grape and Wine Industry Council. The number of Michigan wineries using fruit grown in state has jumped from 18 to 89 in the past couple of decades.

Dan Matthies, who operates Chateau Fontaine in scenic Leelanau County and is a real estate agent focusing on properties suitable for vineyards, has brokered sales of five parcels this year and says he's flooded with inquiries from people wanting to break into the wine business.

"It is one of the brightest spots we have in the state of Michigan," Matthies said, steering a jouncing pickup through one of his vineyards as laborers snipped bunches of grapes and dumped them into giant crates.

The industry's recent growth reflects, in part, the overall health of the nation's farm economy. Farm income is expected to hit an all-time high this year, and the value of farmland has seen double-digit increases.

A 2007 study found that Michigan agriculture was growing five times faster than the state economy as a whole — a trend that appears to have continued, said Bill Knudsen, a Michigan State University analyst who wrote the report and is preparing an update.

"The fact that food is a necessity means even though things are bad, agriculture will at least hold its own," Knudsen said. "It isn't completely recession-proof but it comes about as close as you will ever find."

Wine isn't a necessity, of course. But vineyards, like many Michigan farms, have benefited from consumers' growing interest in locally produced foods. Wine sales in Michigan rose 4 percent overall last year, but sales of Michigan-made wines jumped 12 percent. Matthies said that's no accident: Customer loyalty matters in a state where "Buy American" became a rallying cry as imports hammered the auto industry.

"They realize we are literally selling them the fruits of our labor ... and they're supporting us," he said.

During a visit to Chateau Fontaine's tasting room, Joseph Jones of Fife Lake said he's willing to pay more for Michigan wine than for similar varieties from California or Europe.

"We want to see our wineries succeed," said Jones, who isn't related to Linda Jones. "Their quality is excellent, so it's not like we're stepping down."

The recession's most noticeable effect is that people are buying less expensive wines, just as they've settled for hamburger instead of steak, Linda Jones said. They're also buying more bottles at stores to drink at home while cutting back at restaurants, where wine costs more.

"But people drink in good times and bad," she said. "It's an affordable indulgence to have a good bottle of wine with a meal."

Michigan's wine industry also has benefitted from the state's climate. Most of the state's vineyards and wineries are near Lake Michigan in the western corners of the Lower Peninsula, notable for gentle slopes formed by Ice Age glaciers.

The lake has a moderating influence on temperatures near the shore, helping prevent late spring frosts while prolonging mild weather for fall grape harvests. Abundant snow wraps vines in a thick blanket that prevents winter freezing. Hillsides provide generous exposure to the sun during summer growing season.

Vineyards have already gobbled up much of the land suitable for grape growing and the number of good locations left is dwindling, said Paolo Sabbatini, a Michigan State viticulturist. But he also said growers are experimenting with "super-hardy" varieties that could expand significantly the reach of Michigan wine country. For now, about 2,000 of the state's 14,600 acres of vineyards produce wine grapes. The rest are used for juice.

Michigan's reputation for quality wine has surged while its lineup of varieties has expanded. Wineries are now turning highly regarded selections of merlot, pinot noir, pinot blanc, cabernet franc and ice wines, a dessert variety made with grapes frozen before harvesting.

"It's been like an explosion the last couple of years. They've been winning medals left and right, competing across the U.S. and internationally," said Yolanda Daly, director of the Pacific Rim Wine Competition in San Bernadino, Calif. "Beautiful wines are coming out of Michigan."

As word spreads, businesses in Michigan's wine regions reap the benefits. About 1 million people visit the state's wineries each year. They tend to have enough money for dining out, buying gifts and entertainment, said Brad Van Dommelen, president of the convention and visitors bureau in Traverse City, recently named by TripAdvisor.com as one of America's top 10 wine destinations.

The industry pumps about $300 million into the state's economy each year and employs thousands of people in wine production and spinoff jobs in hotels, restaurants and shops.

"We're also making lists of the top foodie towns because of our restaurants," Van Dommelen said. "When you offer a top-quality wine experience along with that, it's huge for tourism — and for the entire local economy."